Making mistakes is something nobody enjoys, and this sentiment is particularly heightened in the business realm, where an erroneous decision can cause financial losses, wasted time, and resource depletion.
Recent survey findings shows that a significant number of companies are incurring substantial costs by purchasing inappropriate software.
The report in question is the 2024 Tech Trends Survey. It was conducted and published by Capterra, a company that helps businesses choose software by compiling reviews and offering guidance. The study focuses on the responses of 700 U.S.-based companies. Of those, about two-thirds regretted at least one of their software purchases made in the previous 12 to 18 months. And more than half of those suffering regret described the financial fallout of the bad decision as “significant” or “monumental.”
Yikes! Clearly, it’s in every business’s best interest — both financially and operationally — to go slow when it comes to buying software.
Inquiring minds
The next time you think your company might need new software, begin the decision-making process with a series of inquiries. That is, sit down with your leadership team and ask questions such as:
- What functionalities do we need?
- Are we talking about an entirely new platform or an upgrade within an existing platform?
- Who will use the software?
- Are these users motivated to use a new type of software?
Compatibility is an issue, too. If you’re using an older operating system, new software could be buggy or flat-out incompatible. In either case, you could incur substantial additional costs to update or replace your operating system, which might involve new hardware and impact other software.
When deciding whether and what to buy, get input from appropriate staff members. For example, your accounting personnel should be able to tell you what types of reports they need from upgraded financial management software. From there, you can differentiate “must haves” from “nice to haves” from “needless bells and whistles.”
If you’re considering changes to “front-facing” software, you might want to first survey customers to determine whether the upgrade would really improve their experience.
Prequalified vendors
When buying software, businesses often focus more on price and less on from whom they’re buying the product. Think of a vendor as a business partner — that is, an entity who won’t only sell you the product, but also help you implement and maintain it.
Look for providers that have been operational for at least five to 10 years, have a track record of successful implementations and can provide references from satisfied customers. This doesn’t mean you shouldn’t buy from a newer vendor, but you’ll need to look much more closely at its background and history.
For each provider, find out what kind of technical support is included with your purchase. Buying top-of-the-line software only to find out that the vendor provides poor customer service is usually a quick path to regret. Also, is training part of the package? If not, you’ll likely need to send one or more IT staffers out for training or engage a third-party trainer, either of which will cost you additional dollars.
Your goal is to create a list of prequalified software vendors. With it in hand, you can focus on comparing their products and prices. And you can use the list in the future as your software needs evolve.
No remorse
“Regrets, I’ve had a few,” goes the famous Sinatra song. Buying the wrong software doesn’t have to be one of them for your business. Your Rudler, PSC advisor can help you identify all the costs involved with a software purchase and assist you in ensuring a positive return on investment. Contact us at 859-331-1717.
RUDLER, PSC CPAs and Business Advisors
This week's Rudler Review is presented by Jim Gyimah, Senior Accountant and Eric Ficke, CPA.
If you would like to discuss your particular situation, contact Jim or Eric at 859-331-1717.
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